The financial statements for MHM Bank (MHM) are shown below: (LG 12-5)

a. Calculate the dollar value of MHM’s earning assets.

b. Calculate the dollar value of MHM’s interest-bearing liabilities.

c. Calculate MHM’s spread.

d. Calculate MHM’s interest expense ratio.

Balance Sheet MHM Bank Assets Liabilities and Equity Cash and due from banks $ 1,920 Demand deposits $10,620 Demand deposits at other FIs 1,100 Small time deposits 10,350 Investments 6,080 Jumbo CDs 7,670 Federal funds sold 2,990 Federal funds purchased 470 Loans (less reserve for loan losses of 2,400) 20,040 Other liabilities 2,000 Equity 3,290 Premises 2,270 Total Total assets $34,400 liabilities/equity $34,400 Income Statement MHM Bank Interest income $4,048 Interest expense 2,024 Provision for loan losses 100 Noninterest income 700 Noninterest expense 975 Taxes 235.

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